This article forms part of our series of blogs covering the National Employment Standards (NES). These are the minimum terms of employment that apply to those Australian workers who are part of the National Workplace Relations System (which is the vast majority of workers, refer here for more details), regardless of whether or not they are covered by an Award.
Whilst employers and employees can agree to terms that supplement the NES, they cannot provide for conditions that are less than the NES or the national minimum wage. The NES cannot be excluded, modified, or reduced; they form part of the “safety net” that covers the majority of Australian workers.
The Pathway to Permanent Employment for Casual Employees
If you employ casual staff, recent changes to the National Employment Standards (NES) have made it more important than ever to understand your obligations and options regarding the conversion of casuals to permanent employment (full-time or part-time). This article breaks down what small business owners and managers need to know, including recent updates and best practice advice.
What’s Changed? The Shift from Casual Conversion to Employee Choice
From 26 August 2024, the pathway for casuals to become permanent employees shifted from the “casual conversion” model to a new “employee choice” pathway outlined in the NES. This means eligible casuals now have the right to notify their employer in writing if they wish to become full-time or part-time. An employer can only refuse the notice for certain reasons. For small businesses (those with fewer than 15 employees), the new rules applied from 26 August 2025.
Understanding Casual Employment and Eligibility
A person is a casual employee if, when they start employment:
- the parties understand that there is no firm advance commitment to ongoing work, taking into account a number of factors, and
- the employee is entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.
For further details regarding the nature of casual employment, click HERE.
Under the employee choice pathway, a casual employee can generally provide their employer with written notice to change to permanent employment if:
- they have worked for their employer for at least 6 months (or 12 months in the case of a small business), AND
- they believe the employment arrangement no longer reflects the definition of casual employment.
Note: Service before 26 August 2024 isn’t counted for eligibility under the new pathway.
How Does the Employee Choice Pathway Work?
- Notification: The casual provides written notice to the employer, stating they want to change to permanent employment.
- Consultation: Before formally responding, the employer must consult with the employee. Discussions should include what will change if the employer accepts the notice and the employee is converted to full or part-time employment (eg. what the hours of work would be, when the change would occur and what pay rate would apply, particularly given that the employee will no longer be entitled to a casual loading).
- Response: The employer must consult and respond in writing within 21 days of receiving the notice from the employee, either accepting or refusing the change. If refusing the change, the written response must include the reasons for the decision (refer below).
Valid Reasons for Refusal
Employers can generally only refuse a request if:
- the employee still meets the definition of a casual, or
- there are genuine and reasonable operational/business grounds for the refusal (e.g. substantial changes would be required to the operation of the business to accommodate the change, or there would be significant impacts on the business if the change were made).
If the employee disputes the refusal and the issue can’t be resolved internally, employees and employers can seek assistance from the Fair Work Commission.
Practical Example
Jane has worked as a casual for over a year, with consistent hours every week. Jane gives her employer written notice to change to part-time employment. Her employer promptly meets with her to discuss her pattern of work and agrees that she no longer meets the definition of a casual employee and could convert to part-time. They further discuss and agree on her part-time hours and pay rate, and that the change should commence from the start of the next pay period. Jane is issued with and signs a new part-time employment contract. This proactive approach helps Jane’s employer retain a valued team member and ensures their compliance with the law.
Tips for Small Business Owners and Managers
- Keep Accurate Records: Track casual engagement dates and work patterns to assess eligibility easily if/when you are provided with a notice by an eligible casual employee.
- Communicate Clearly: Be open with staff about their options and your obligations.
- Use Templates: Fair Work provides templates for both employee notices and employer responses. (there’s a link below)
- Review Your Policies: Update applicable employment policies and contracts to ensure they reflect the new rules.
- Consider notices promptly: If you receive a notice from an eligible employee, you must consult with them and respond in writing within 21 days.
- Seek Advice Early: If you’re unsure, get advice before responding to a request.
- BONUS TIP: Don’t forget that the Casual Employment Information Statement (which contains much of the information above) needs to be given to new casual employees before they start employment, or as soon as possible after. It also needs to be provided to all casual employees again after:
- 12 months of employment for casual employees of small businesses
- 6 months of employment, 12 months of employment, and every subsequent period of 12 months of employment for casual employees engaged by a business other than a small business.
Why This Matters
Complying with these rules isn’t just about avoiding penalties; it’s about building trust and stability in your team. Permanent employment offers security for employees, which can boost retention and morale. For employers, it can mean a more committed and reliable workforce.
For further information and relevant templates from the Fair Work Ombudsman, click HERE.
This article provides general information which we believe to be correct at the time of posting. It is a summary and must not be considered complete, professional or legal advice. If you’re an employer and need support that takes into account your particular circumstances, please contact us directly.
